Do corporate boards matter during the current financial crisis?

Bill B. Francis, Iftekhar Hasan, Qiang Wu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

68 Citations (Scopus)


This study examines the impact of corporate boards on firm performance during the current financial crisis. Using buy-and-hold abnormal returns over the crisis to measure firm performance, we find that board independence, as traditionally defined, does not significantly affect firm performance. However, when we redefine independent directors as outside directors who are less connected with current CEOs, a measure we call strong independence, there is a positive and significant relationship between this measure and firm performance. Second, outside financial experts are important for firm performance. We find that the positive impact of outside financial experts on firm performance is more significant than that of strong independence. Overall, our results suggest that firm performance during a crisis is a function of firm-level differences in corporate boards.

Original languageEnglish
Pages (from-to)39-52
Number of pages14
JournalReview of Financial Economics
Issue number2
Publication statusPublished - Apr 2012
Externally publishedYes


  • Boards of directors
  • Financial crisis
  • Financial experts
  • Firm performance
  • Independence

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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